Managerial Accounting Questions Exam 3

the master budget

The comprehensive set of budgets that serves as a company's overall financial plan is commonly known as

actual results can be compared

a budget serves as a benchmark against which

cash budget

a company's expected receipts from sales and planned disbursements to pay bills is commonly called a

capital budget

a company's plan for the acquisition of long-lived assets, such as buildings and equipment, is commonly called a

financial budget

a company's plan for the issuance of stock or incurrence of debt is commonly called a

sales budget

a manufacturing firm would begin preparation of its master budget by constructing a

false

a standard cost card shows what the company should spend to produce a single unit of product based on expected production for the coming period

is based on one anticipated activity level

a static budget

false

companies develop a set of operating budgets to project cash flow and likely cash shortfalls and/or surpluses

activity levels

flexible budgets reflect a company's anticipated costs based on variations in

false

in an activity-based flexible budget, each overhead item has the same cost driver, identified by flexible overhead budget for that cost item

purchasing, production

the _______________ department would generally begin an initial investigation of an unfavorable material price variance and the ____________ department would generally begin an initial investigation of an unfavorable materials quantity variance

true

the activity-based flexible budget provides a more accurate benchmark against which to compare actual costs than does a conventional flexible budget

direct materials price variance

the difference between the actual price and the standard price multiplied by the actual quantity of materials purchased, is the

production budget

the direct materials budget is prepared using which budget's information

sales budget

the first step in developing a master budget is always the creation of which of the following

purchasing manager

the individual generally responsible for the direct-material price variance is the

adding budgeted sales to the desired ending inventory and subtracting beginning inventory

the units required in production each period are computed by which of the following methods

unfavorable variance

this variance is the difference involving spending more or using more than the standard amount

false

variances are computed by taking the difference between the product cost and standard cost

more qualified workers

what are some reasons for a material quantity variance

the static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels

what is the primary difference between a static budget and a flexible budget

sales budget, selling and administrative budget, budgeted income statement, budgeted balance sheet

what is the proper sequencing of the following budgets

planning , performance evaluation, coordination of activities

what managerial functions that are commonly associated with budgeting

when the actual quantity used is greater than the standard quantity

when is the material price variance unfavorable

when the actual quantity used is less than the standard quantity

when is the material quantity variance favorable

flexible budget

which budgets evaluates the results of operations at the actual level of activity

all of the listed choices are correct

which of the following could be found on a flexible overhead budget

hiring unqualified workers

which of the following is a possible cause of an unfavorable labor efficiency variance

purchasing substandard material

which of the following is a possible cause of an unfavorable material quantity variance

standard cost

which of the following is a predetermined estimated cost that can be used in the calculation of a variance

cost drivers

which of the following should have the strongest cause and effect relationship with overhead costs

FPMs have become less popular in recent years because of computers and spreadsheets

which of the following statements about financial planning models (FPMs) is (are) false

both normal and standard costing

which systems use a predetermined overhead rate

use of standard hours versus actual hours

with respect to overhead, what is the difference between normal costing and standard costing